Chipmaker Marvell seen in play after top management exit

(Reuters) - Marvell Technology Group Ltd’s CEO and president - a husband-wife duo who co-founded the company - are stepping down, a move analysts said could presage a sale of the chipmaker.

Sehat Sutardja, CEO of Marvell Technology Group, speaks at the Reuters Global Technology Summit New York May 18, 2009. REUTERS/Brendan McDermid

Shares of the company, in which activist investor Starboard Value LP disclosed a 7 percent stake in February, jumped as much as 13 percent to $10.89 on Tuesday.

Starboard was pressuring Marvell to cut costs and exit its mobile-wireless business, Reuters had reported, citing a person familiar with the matter.

The departures of CEO Sehat Sutardja and President Weili Dai come a month after an audit-committee probe found the management had put significant pressure on sales teams to meet targets.

The committee, which found no fraud in Marvell’s accounting practices, also raised questions about a patent Sutardja had initially claimed as his before passing onto the company.

“With this departure, the company could be setting itself up for a sale or a break up,” Ladenburg Thalmann & Co analyst Daniel Amir said in a note.

Amir, who said Marvell could be valued at $12 per share on a sum-of-the-parts basis, told Reuters that after Starboard was added to the mix, the board could have pre-empted a proxy fight and made changes at the top.

Marvell, which has a market value of about $5 billion, has been plagued by a barrage of problems even as a declining market for personal computers has hurt demand for its chips used in hard disk drives.

The company said last week that it would not be able to file its annual report on time.

Marvell said on Tuesday it had formed an interim office of the chief executive for day-to-day operations.

The office will be headed by Maya Strelar-Migotti, executive vice president, smart networked devices and solutions business and Pantelis Alexopoulos, executive vice president of the company’s storage business, as interim co-chief executive officers.

Sutardja will continue as chairman and Dai will remain on the board, the company said. Sutardja had co-founded the chipmaker in 1995, along with his Dai and his brother Pantas.

Reporting by Abhirup Roy in Bengaluru, additional reporting by Kshitiz Goliya; Editing by Saumyadeb Chakrabarty and Sayantani Ghosh